Investors in private equity funds must get comfortable about the economics of the partnership. In today's market place, are managers being overcompensated, ask Oliver Gottschalg, Bernd Kreuter and Ludovic Phalippou.

The accurate selection of private equity fund managers is as crucial for the performance of one's private equity portfolio as it is challenging. Data paucity, few benchmarking possibilities and the long time lag between commitment decisions and performance outcomes makes private equity fund due...